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2016 (12) TMI 437 - AT - Service TaxLevy of tax - commission agents service - business auxiliary service - reverse charge mechanism - Held that: - I have perused the records and I notice that the grounds of appeal have contested the levy imposed by the original authority on the consideration paid to commission agents outside the country both by questioning the legality of the levy and coverage beyond the normal period of limitations This is in contrast with the specific prayer for setting aside of penalty. It must be pointed out that the proceedings before the first appellate authority on this issue was also limited to imposition of penalty. The Tribunal cannot, therefore, revisit the demand for tax on services provided by commission agents abroad. I, therefore, decline to consider the challenge other than that of imposition of penalties. No justification has been brought forth either in the appeal or in the submissions that penalties under section 70 and 77 are not to be imposed. The discretionary empowerment under section 80 of Finance Act does not extend to penalties imposed under section 70. The tax confirmed and accepted as liability by the appellant is ₹ 1,93,075 for the period from 2006-07 to 2007-08 and ₹ 1,24,465 for 2008-09. No penalty has been imposed under section 76 in relation to the latter demand. It is, however, seen that service tax and interest paid before the issue of show cause notice. The original authority has not imposed penalties under section 78 of Finance Act, 1994 implying that the ingredients spelt out in section 73(4) of Finance Act, 1994 does not exist. Consequently, the issue of show cause notice for recovery of ₹ 1,93,075 and ₹ 1,24,465 for the two respective periods was not warranted in law as per section 73(3) of Finance Act, 1994. In the absence of show cause notice, penalty under section 76 of Finance Act, 1994 could not have been imposed - penalty u/s 76 set aside - appeal disposed off - decided partly in favor of appellant.
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